'With the rate war ongoing this is the perfect time for borrowers to secure a low fixed rate with this popular brand.'

Mike Regnier, Yorkshire Building Society's chief commercial officer, said: 'We are a responsible mutual lender which uses its financial strength to support its members rather than external shareholders.

Tumbling rates: According to Moneyfacts, the average fixed-rate mortgage deals have been sliding since last year

'This means we can offer our members very competitive rates in order to enable them to buy the home of their choice.

'Earlier this year, we launched a 1.18 per cent mortgage, which was then our lowest-ever rate to date, and we are now very proud to better that by offering the UK's lowest-ever two-year fixed rate mortgage of 1.07 per cent.'

Data from Moneyfacts shows the average two-year fixed rate fell from 2.97 per cent to 2.95 per cent between April and May.

If you were considering a two-year fixed rate deal at this point last year the average rate was 3.62 per cent, but you would now pay less to fix for longer as the average five-year deal has fallen to 3.44 per cent.

An average five-year deal would have cost 4.09 per cent this time last year.

But despite record low rates, data from the Council of Mortgage Lenders earlier in the week showed in the first three months of the year, first-time buyers took out 61,300 loans - down 24 per cent on the fourth quarter of 2014 and 11 per cent down on the first quarter of 2014.

Home movers took out 70,400 loans, a decrease of 25 per cent compared to the fourth quarter of 2014 and a decrease of 11 per cent year-on-year.